Toyota to cut bonuses and output as sales slump
Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) said on Tuesday it will cut management bonuses by 10 percent as the global economic slowdown bites hard and prompts it to reduce production further in Japan, reported Reuters.
The world's largest automaker is cutting bonuses for roughly 8,700 managers in Japan, spokesman Akira Adachi said. The company declined to disclose how much it would save.
Global automakers are reeling from the worst downturn in decades as sales slump in the United States and Europe and even in developing markets such as China, which carmakers had hoped would fuel near-term growth.
The financial crisis has hit the U.S. Big Three -- General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz), Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) and Chrysler LLC -- hardest, forcing them to plead for government aid to stay in business as they burn through billions of dollars every month.
Toyota will halt production at one of three assembly lines at its Tahara factory in central Japan for two days at the end of this month, resulting in a loss of less than 5,000 cars. The line produces the LS, GS and IS models for the premium Lexus marque.
Another factory in southern Japan operated by a subsidiary will also halt production for two days. The Toyota Motor Kyushu factory produces the Lexus IS, ES and RX models as well as the Toyota Harrier and Highlander.
Car sales in Japan, excluding 660cc minivehicles, fell 27 percent last month to the lowest level for November in 39 years, industry data showed on Monday, with sales tumbling at Toyota and its rivals Nissan Motor Co (7201.T: Quote, Profile, Research, Stock Buzz) and Honda Motor Co (7267.T: Quote, Profile, Research, Stock Buzz).
Lexus sales in Japan are down 24 percent in the year to date and are falling hard also in the United States, the brand's main market.
Elsewhere, India's top vehicle maker, Tata Motors Ltd (TAMO.BO: Quote, Profile, Research, Stock Buzz), said it would shut its commercial vehicle plant in the western city of Pune for three days from December 5, as it tries to avoid a build-up in unsold stock.
Toyota is set to disclose far weaker sales and production estimates for 2008 and 2009 at a year-end news conference later this month after lowering the projections once this summer.
It slashed 1 trillion yen ($10.7 billion) from its annual operating profit forecast last month and has set up an emergency committee aimed at improving short-term profitability in the face of growing headwinds.
Confidence among Japanese manufacturers fell at its sharpest pace on record in November, the Reuters Tankan showed on Tuesday, with the automotive sector reporting one of the weakest readings. The Reuters Tankan is a monthly poll of big Japanese firms that tracks the Bank of Japan's closely watched quarterly tankan, next due on December 15.
Shares of Toyota fell 4.1 percent to 2,825 yen, outperforming a 6.4 percent slide in the Nikkei .N225 average.